New investor InvestMichigan Growth Capital Fund led the round, joined by existing investors Highlander Partners, Hopewell Ventures, Pharos Capital Group and River Cities Capital Funds. Valuation was not disclosed.
Based in Marquette, Mich., Pioneer Surgical was founded in 1992 to develop surgical devices. This decade, the company has branched out into other orthopedic areas and, more recently, biologics, following the June 2007 acquisition of Encelle Inc. and the October 2007 acquisition of Angstrom Medica Inc.
Wesley McDermott, vice president of new business development for Pioneer Surgical, said the money will be used for the NuBac, a nucleus replacement device made from the company's Peek Optima material. "We just received an [investigational device exemption], the first for a lumbar nucleus replacement device," he said. "Our goal is to get through the pivotal study with this funding."
McDermott declined to say how long the trial would last or how the company would finance the sale of the device.
Pioneer Surgical, which raised a $30 million Series A in 2006 from the four returning investors in this round, is also generating revenue from its spine, orthopedics and biologics businesses, McDermott said, although he declined to say if the company has reached break-even. He said the cash-flow would also be used to finance the NuBac pivotal trial, a fact that made it easier to raise cash in a challenging venture market.
"Folks were very responsive to our round," McDermott said. "We have cash flow we're contributing to the trials; that's why we were able to raise the money in today's market."
Thomas Weisel Partners served as adviser to Pioneer Surgical on the funding.
InvestMichigan has received a $300 million commitment from Michigan's pension fund. The fund is co-managed by Beringea, which could not be reached for comment, and Credit Suisse's Customized Fund Investment Group.
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